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Please review and correct the "Cost Decrease" in the following problem. I can't determine how they calculated the $390,002 cost decrease in the answer grid. I calculated 39,000 for the decrease.

Question

1) Calculate the economic value added for the AnswerDash product with Daves (assuming $4.5 M in revenue and 104,000 site visits).For Increased Revenue, assume that:

E-Commerce variable costs are 65%

Revenue increase is 12% (Tire Buyer, pg 10) to 30% (BenBridge & Red Awning, pg 10)

For accuracy, do both cases where 10% is low and 30% is high

For decreased costs:

1% of site visitors engage customer support

The reduction in tickets is 50%

The cost per ticket is $7.50

Revenue = $4.5 M

Site traffic = 104000

Increased revenue (10%) = (100 - .65 = .35) * 4.5M *.10 = 157500

Increased Revenue (30%) = .35 * 4.5M * .30 = 472500

Cost decrease = 104000 * .1 = 10400

50% * 10400 * 7.50 = 39000

Total EVA (Low) = 157500 + 39000 = 196500

Total EVA (High) = 472500 + 39000 = 511500

Answer Grid

Dave's
Company Revenue		$4,500,000
Site Traffic (per year)		104,000
Increased Revenue (low) =	.35 x $4,500,000 x .12	$189,000
Increased Revenue (high) =	.35 x $4,500,000 x .30	$472,500
Cost Decrease	.50 x (.01 x Cust Supp Tx) x $7.50	$390,002
Total EVA =	Total EVA (low) =	$579,002
	Total EVA (high) =	$862,502

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